Tesla to sell $1.4 billion in stock to pay for Model 3, expansion

Tesla Motors Inc. said it will sell about $1.4 billion in stock to help pay for an expansion that includes its Model 3 electric car and boosting annual production to 500,000 vehicles in 2018.

The Palo Alto company faces a sharp rise in spending for its accelerated production plan, which includes making as many as 200,000 of its Model 3 cars by the second half of next year.

Tesla is also building a massive battery factory east of Reno, expanding sales and service globally, and adding charging stations for use by customers.

For this year, capital expenditures will increase by about 50 percent, or $750 million, from the company’s original budget, Musk said on a first-quarter earnings conference call on May 4.

“It’s going to make sense for us to raise some amount of money, some combination of equity and debt and make sure the company has a good buffer of cash on hand,” Musk said on the call.